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The labour market in 2016

Labour market continues to develop positively with moderate economic growth
03 Jan 2017 | Press Release No. 2

“The labour market developed positively in 2016: unemployment fell once again, employment increased further, in particular in the first half of the year, and the demand by companies for new employees has once again risen substantially,” said Frank-J. Weise, Chairman of the Executive Board of the Federal Employment Agency (BA), at today’s monthly press conference in Nuremberg.

Number of unemployed in 2016:
2,691,000

Number of unemployed compared with the previous year:
-104,000

Unemployment rate compared with the previous year:
-0.3 percentage points to 6.1 per cent

Unemployment and underemployment

An average of 2,691,000 persons were registered as unemployed in Germany on average in 2016. In comparison with the previous year, there were 104,000 fewer unemployed persons.

In 2016, underemployment, which also covers persons taking part in relieving employment and training measures and those affected by short-term incapacity for work, affected 3,581,000 persons on average, which was 50,000 fewer than in the previous year. The reason why, on average for the year, unemployment fell even more than underemployment is explained by the increasing relief provided by employment and training programmes. Measures for activation and integration into employment increased, as did so-called “Fremdförderung”, in which above all participation in integration courses is recorded by the Federal Office for Migration and Refugees (BAMF). Decreases were seen in partial retirement, support for which expired at the end of 2015.

Development in the unemployment insurance scheme

Of the 2,691,000 unemployed persons, on average for the year 822,000, or 31 per cent, were supported by an employment agency in accordance with SGB III (Social Code Book III). This was 37,000 less than the previous year. In 2016, a total of 788,000 persons received unemployment benefit, 46,000 less than in 2015.

Development in basic security scheme for jobseekers

In 2016, based on extrapolated values a total of around 4,310,000 persons eligible for benefits and capable of work were supported by a Jobcenter in accordance with the basic security scheme (Social Code II). This was a drop of 18,000 in comparison with the previous year. The proportion of persons eligible for benefits and capable of work among the total population of working age in Germany was 7.9 per cent, slightly less than the previous year’s figure. In 2016, on average 1,869,000 persons (69 per cent of all unemployed persons) were registered in the Social Code II system. This was 67,000 less than the previous year. A large portion of recipients of unemployment benefit II is not registered as unemployed. This is because these persons are gainfully employed, look after small children, care for relatives, or are still in vocational training.

Gainful employment and employment subject to social insurance contributions

Gainful employment and employment subject to social insurance contributions continued to grow in 2016. According to provisional data from the Federal Statistical Office, on average for the year the number of those in gainful employment rose by 429,000 to 43.49 million. This means that gainful employment has reached its highest level since reunification.

As in previous years, in 2016 employment subject to social insurance contributions increased more strongly than gainful employment. The other forms of gainful employment, e.g. marginal employment, or self-employment, were largely in decline. In June 2016, 31.37 million employees were in employment subject to social insurance contributions. This was 602,000 more than one year before. The economic situation can only partly explain the strong increase in employment. Other factors, such as sectoral change, a high degree of labour market tension and immigration gained in importance for employment and led to a stable upswing.

Demand for labour

In 2016, the average stock of registered vacancies was 655,000. This was 87,000 more than in the previous year. In 2016, most job offers were aimed at workers in the fields of transport and logistics, sales, metal, machine and vehicle construction and health.

In 2016, the BA-X, a seasonally adjusted indicator for the demand for labour in Germany, showed almost continuous growth and, with 227 points at the end of the year, was at its highest level.

Budget of the Federal Employment Agency

The Federal Employment Agency’s budget for the year 2016 is concluding with a surplus in the amount of EUR 5.4 billion. The budget for 2016 assumed a plus in the amount of EUR 1.8 billion.

The positive situation on the labour market led to much lower expenditure over the course of the year. The great demand for labour led to a further reduction in the numbers of unemployed. Expenditure for unemployment benefit was EUR 14.4 billion, around EUR 1 billion less than planned. The robust economy was reflected as well in the expenditure for insolvency benefits, which were EUR 0.3 billion less than expected. The integration chances for unemployed persons were on the whole good in 2016. Integration in the labour market was realised in many cases without support. However, immigrants required special attention. For this reason, the Federal Employment Agency intensified its integration efforts in the training and labour markets for this group. Among other things, it financed the participation of over 233,000 people from Eritrea, Iraq, Iran and Syria in language courses to the tune of EUR 0.3 billion. A total of EUR 8.1 billion was spent on active employment promotion.

Over the course of the year, employment and wages developed slightly more positively than assumed. EUR 0.2 billion more contributions to the unemployment insurance scheme were paid than provided for in the budget.

Of the realised result, around EUR 4.9 billion will be transferred to the general contingency reserve. The remaining funds will be transferred to the specific reserves for insolvency benefits and winter employment promotion.